"Today I’ve taken every step within my power to allow offshore exploration of the OCS (Outer Continental Shelf). This means the only thing standing between the American people and these vast oil resources is action by the U.S. Congress."

A Congressional ban remains in place, meaning that while Bush’s action is to some degree symbolic it nevertheless puts tremendous pressure on the Democratic leadership in Congress.

President Bush clearly knows he’s struck a rich vein which could benefit not only his approval ratings but electoral chances for Republicans across the nation: “The time for action is now. This is a difficult period for millions of American families. Every extra dollar they have to spend because of high gas prices is one dollar less they can use to put food on the table or send a child to school. And they are rightly angered by Congress’ failure to enact common-sense solutions….The American people are watching the numbers climb higher and higher at the pump — and they’re waiting to see what the Congress will do.”

Democratic Senate Leader Harry Reid responded to President Bush’s announcement in typical fashion, discussing everything but the real issue. Reid argued for more “investment” in alternative energy and said the Senate would pass a bill shortly which goes after "the greedy speculators". There was not a hint of movement by Reid toward supporting OCS drilling, and it shows the political box he is in.

The Democrats receive an enormous amount of money from environmentalist organizations and Barack Obama’s base is the far left fringe of the Democratic Party, a point highlighted by this article about the netroots strange obsession with Obama’s vote on the Foreign Service Intelligence Act. Reid, Obama, and Nancy Peolosi are caught between needing to pander to their financial base versus addressing the issues important to the larger electoral base. For now, they’re going with the former but that could change once the checks clear, much as we’ve seen with Obama’s recent gut-wrenching swerve toward the political middle.

As John McCain said, it’s interesting that the party of the "Yes, we can" candidate spends all their time saying "no, we can’t" when it comes to domestic oil production. And today, Senator Pete Domenici (R-N.M.) called Reid a “scared chicken”.

The public is abandoning the Democrats on this issue. Recent polls show that voters have moved rapidly toward supporting OCS drilling, with “support for energy exploration at its highest point this decade” and a full 50% now supporting drilling in ANWR. Over the last few weeks, McCain has been steadily catching up with Obama in national polls, and Congressional job approval is at an all-time low…reaching single digits in a Rasmussen poll. People know that Democrats control Congress. The inter-related issues of oil prices and the economy have become the dominating issues for voters, with Iraq moving into third or fourth place (with health care).

Senator McCain would be in a stronger position if he had been for drilling all along, or if he changed his headstrong opposition to drilling in ANWR. Still, he can make a case that the entire Democratic Party is an impediment to getting fuel prices lower and that the all but certain substantial dominance of the Democrats in the next Congress makes electing a Republican that much more important.

The argument being made most frequently by the "just say no" crowd, is that allowing OCS drilling won’t bring new oil to market for many years, implying that it’s therefore a waste of time. Reid also mentioned the already tired claim that oil companies already have millions of acres under lease which aren’t producing oil.

Whether a decade ago or now, it has always been true that exploration can’t be done overnight. That is no reason not to begin. How often do you hear any company say that they’re not going to build a factory to produce something because it won’t be done in a week? Also, the idea that a long time to market means that there will not be any short term price impact shows a remarkable lack of understanding of markets. If investors believed there was a massive new supply of oil coming, even if not for a few years, they’ll be much less interested in investing in oil now. Furthermore, it would encourage the participation of evil "speculators" willing to bet on the downside. (Of course, those traders will never receive the thanks that should be the other side of a coin blaming speculators for all our troubles.)

The implication of the time to market argument is that alternative energy sources would be available on a large scale much sooner. Those who favor drilling (whether or not we favor alternative energy as well) should point out that approval and construction of a nuclear plant would take about as long as getting oil out of a new OCS location or ANWR and that the most recent large-scale wind farm proposal contemplates at least 5 years to finish (and if you believe that project would finish on time, I have a bridge to sell you.) Large-scale solar may eventually be economical, but right now it is still very expensive. So the only alternative energy source even somewhat available on a large scale in the short term is ethanol, which is slowly but surely losing support even among liberals as the world realizes that you can’t save the planet by burning our food. So when an environmentalist tells you that getting oil out of ANWR or the OCS will take too long, ask them the all-important question: “Compared to what?”

As far as acreage under lease which isn’t producing oil now, it defies logic to claim that oil companies are simply sitting on this land. The companies have a limited number of years to develop production on leased land or lose the lease and the money they spent on it. The process of getting to production involves of seismic and other scientific studies of the land, determining whether production is actually feasible and economic, and then getting infrastructure in place after several years and millions of dollars sunk into the project before getting the first drop out. A non-producing lease is not the same as an inactive one.

Americans notice the words of politicians much less than they notice the prices at the pump. At the end of the day, all the politics will sound something like "Let’s drill" from Republicans and "No way" from the Democrats. There’s nothing subtle about the difference. The Democrats have a history of snatching defeat, especially Presidential, from the jaws of victory. Oil prices and a modestly slowing economy are giving them this election season’s razor issues with which they may yet again cut their own electoral throats.

Ross Kaminsky has been a professional derivatives trader for over 20 years. Ross is a fellow of the Heartland Institute and writes about political economy and current events at Rossputin.com. He also contributes to blogs for the National Taxpayers Union and FreedomWorks among others.